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Mediation Tips
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Mediation Tip #8 – Who Should Pay Mediation Costs?

October 8, 2015 by Glenn Loewenthal

batman-and-robin-w1Maybe as a neutral I am overstepping my bounds a little here, but my intentions are in the right place. I see a trend in mediation that I think is leading to fewer settlements and that I think can be fixed or reversed. However, I think there is an easy fix to reverse that trend.

First and foremost, let me say that nobody should ever expect the other side to pay mediation costs. Whether the mediation is court ordered, suggested by the plaintiff or suggested by the defense or insurer, there is no built in expectation that any party will pay the other’s mediation costs. Some plaintiffs will come into a mediation with the expectation that because the defense suggested the mediation, and even picked the time, place and mediator, that they will or should pick up the plaintiff’s mediation costs. Again, no party should have this expectation, as such an expectation only leads to disappointment when they find out that is not the case. And disappointment can lead to other bad feelings that result in a failed mediation.

I do think it is a good idea for parties to address the issue of mediation costs when they agree to mediation. For example, if the defense knows at the outset that no matter the outcome of the mediation, that they know they will not pay the other party’s mediation costs, that information should be shared with opposing counsel so that they will not have any expectation coming into the mediation and can plan their strategy accordingly. Likewise, the economics of some cases may be so small and tight that a plaintiff will only want to mediate a case knowing that if the case settles that the mediation costs will be paid. So it is a good idea for counsel to address this topic when the mediation is first discussed and scheduled.

Now, for my thoughts on who should pay the mediation costs, when they should be paid and why. It is really the when part of the equation where I think reality it completely backwards from where it should be. What I see happening in reality is that in most cases that settled for $100K or more, the defense/insurer picks up all the mediation costs without a second thought. In cases that settle between $50K and $100K, the defense/insurer is picking up the mediation costs about half the time, and in cases that settle for under $50K, the defense picks up the mediation costs about 25% of the time. I think this is a flawed equation, and if reversed, would lead to many more settlements. Here is why.

Mediation costs, unlike the settlement amount, in most cases, is a direct cost to the plaintiff. In other words, it comes directly out of or into the plaintiff’s pocket, whereas settlement funds are usually split between the plaintiff, the attorney and any lien holders. In cases that settle for over $100K, the plaintiff is going to settle the case regardless of whether the defense/insurer picks up their mediation costs. However, for cases under $50K, and in particular cases under $25K, I have seen cases not settle solely because the mediation costs were not paid by the insurer. In these smaller cases, every penny makes a difference to the plaintiff, and because it is a direct cost to the plaintiff, that last thousand dollars is more important in mediation costs than it is in a settlement offer, which is split money. If I have seen this happen, and I am only one of thousands of mediators across the country, it is certainly happening on a daily basis. The defense/insurer is missing out on a great opportunity to settle more cases.

So I say to you insurers (because surely they will read this and listen to me) if you are paying mediation costs in larger cases and not smaller cases, stop it. Reverse that strategy. Stop paying on the larger cases and pay on the smaller cases. I guarantee you will settle more cases, and isn’t that the reason you want to mediate these smaller cases in the first place. Small cases are not economically smart cases to try for either party. However, the insurer is in a greater position to absorb this cost of litigation. Not only will you settle more cases, but the person you settle with may be your past, present or future insured, and the goodwill you buy will pay off tenfold. I can’t tell you how many times, in UM cases, the plaintiff leaves the room having decided to change insurers solely based on the mediation and the perception of how they felt they were treated. So especially in UM cases, I would encourage insurers to offer to pay the mediation costs, even in cases that don’t settle. The goodwill you buy is worth it. In college at UGA I majored in Risk Management and Insurance. We learned a lot about doing cost/benefit analysis. If insurers look at mediation costs using a cost/benefit analysis, their strategy would change, and they would start paying more mediation costs in small cases and less in large cases. In the end, the insurer would save more money, not only based on the analysis from above, but also because small cases are usually shorter and less expensive than larger cases. If you are a defense counsel reading this, I hope you will pass it on to your adjusters and managers for consideration.

Mediation Tip #7 – Who Picks The Mediator?

September 11, 2014 by Glenn Loewenthal

Tug of War

As a mediator, I am privy to being able to ask this question to both plaintiff and defense counsel. I am not surprised by the answers I get. For the most part, when I ask this question to attorneys representing the plaintiff, they say they like to let the defense counsel pick the mediator. And for the most part, when I ask this question to attorneys representing the defendant, they say they want the attorney for the plaintiff to pick the mediator.  Why does each side want the other to pick the mediator?

 

The attorneys for the plaintiffs will usually say they want to let the defense counsel pick the mediator because if they pick the mediator, that means that the mediator will have more sway with the defense counsel and the adjuster, and that the mediator will then be able to turn that gravitas into more money for their clients. The attorneys for the defendants will usually say that they want to let the plaintiff’s counsel pick the mediator because that means the mediator will have more sway with the plaintiff’s counsel and the plaintiff, and that the mediator will then be able to turn that gravitas into convincing the plaintiff’s counsel and the plaintiff to accept the defense’s best offer to settle the case. Hmmm, sounds like both sides are really saying the same thing with the same reasons.

 

Now, is any of this actually true? In my opinion, the answer is yes and no. I say no because a good mediator will have gravitas in both rooms. In other words, a good mediator should have the respect of the attorneys, the parties and the adjusters. The mediator is not an advocate for either side, but is an advocate for a fair resolution. The mediator will tell the plaintiff if they are valuing a case too high and will tell the defense that they are valuing the case too low, if it is needed. I say yes because sometimes perception is reality. If the plaintiff lets the defendant pick the mediator, the plaintiff may perceive that mediator will help the plaintiff to get more money from the other room, and that perception alone will allow the plaintiff to be more comfortable with the process and lead to a resolution. On the same note, if the defendant lets the plaintiff pick the mediator, the folks in the defense room may perceive that the mediator will be able to convince the plaintiff to settle the case. The perceptions, whether true or not, become reality if both sides feel that comfort level needed to resolve the case.

 

So, getting back to the title of this blog, who should pick the mediator? In my opinion, it doesn’t matter who picks. The most important thing is that both sides are comfortable with the pick. The better question is who is the best mediator for this particular case? The answer to that question depends on several variable factors, and I will discuss that in my next blog. As always, if you have any questions about your mediation or the mediation process, or if there is a mediation topic you would like to see for a future blog, please contact me at gloewenthal@milesmediation.com.

 

Mediation Tip #6 – What’s Going on in There?

July 30, 2014 by Glenn Loewenthal

Will Ferrell Meatloaf Scene

Will Ferrell meatloaf scene (click to view)

I was speaking at a recent seminar where a question was asked by a Plaintiff’s lawyer:  “Why do you spend so much more time in the defense room than in the plaintiff room; What are you doing in there?” I couldn’t help but laugh while thinking to myself that this is the same question, in reverse, from defense lawyers who think I spend more time in the plaintiff room. Before we discuss the answers to these questions, I first want to say that there is no pattern I have noticed in spending more time with one side than the other. Each case is different, and in some cases more time needs to be spent in the plaintiff room and in some cases more in the defense room.

Now, to answer the question. As mediators, we are doing many things in the other room. First and foremost, we are listening. We are listening to the lawyers, listening to the parties, listening to the adjusters, listening to anyone who has anything to say. In the initial caucus, it is the mediator’s job to learn as much as possible about the important facts of the case, the motives of the parties, and the objectives of the parties. Sometimes one or both sides don’t say much in the opening statement, though I think that is a mistake (see Mediation Tip #4). If the lawyers don’t provide much information in the opening, the mediator has to spend more time learning about their case. This is why the first caucus is the longest.

Another thing the mediator is doing is developing a rapport and relationship with the people in that room. For example, in the Plaintiff’s room, I want to make sure the plaintiff is at ease with the process and with me and my role. 99% of the time this is the first time the plaintiff has ever been through a mediation. It may be old hat to the lawyers and adjusters, but it is a nerve wracking experience for most plaintiffs. Not only do the plaintiffs need to be at ease with the process and the mediator, they need to know that their attorney is also on their side and the mediator can help with that. The mediator can also help the plaintiff to understand that the people in the other room are also invested in the process and that they are there in good faith to resolve the case. Once everyone in the plaintiff’s room is on board, the mediation will have a better chance to resolve.

In the defense room, the mediator is doing the same thing. We are building the relationship with the lawyers and adjusters and/or corporate representatives, many of whom we have never met before. While many defense cases are “round tabled” before the mediation, many are not. There are many mediations where the defense lawyer and the adjuster are not on the same page. The mediator needs to listen, ask questions, and find out why. One of the mediator’s most important jobs is to make sure that everyone in the defense room is on the same page.

A mediator’s job is much more than a courier of numbers between rooms. The mediator’s job is to build a consensus by the end of the day. In order to do that, we must time whatever time is necessary building relationships, listening to facts, ideas and concerns, and making sure everyone is on the same page and at ease. Tensions can build during a mediation session, and the mediator may need to spend more time in one room than the other keep things calm and running smoothly. We want to put out the fires, not throw more gasoline on them.  Hopefully, this mediation tip will help you understand what is actually going on in the other room.

Mediation Tip #5 – Don’t Leave the Smoking Gun in Your Holster

May 22, 2014 by Glenn Loewenthal

ucs_cartoons_2008-7

This week’s mediation tip applies equally to both sides. At the beginning of every mediation, I always encourage all the participants to share everything with the other side that could potentially impact the value of the case. However, time after time, I hear things from each side that the other side does not know about. I think this is a bad idea for several reasons.

First, each side goes into the mediation with an idea of how much they would like to settle the case for. They do this by evaluating the information they have about their case and their opponent’s case.
If you are missing important information, your evaluation might be off by a little or a lot. If you are the plaintiff, you need to make sure that the defense has all the medical records and bills, any evidence of lost income, and any other evidence that supports your claim on issues of liability and causation. In addition, if you have any information about the defendant that might affect the value of the case, that should be disclosed also. The adjuster for the defense is only going to evaluate how much they are willing to pay to settle the case on the information they have. And don’t wait until the last minute. Defense lawyers and adjusters are very busy, and sending them a new set of medical records the day before mediation will not give them adequate time to evaluate it. Remember that many times your claim has to go through several levels of scrutiny with the insurer before a final mediation authority is set. Sometimes the adjuster at the mediation does not have the authority to make last minute changes to the amount of authority. As a plaintiff, you may not get as much money as you would have if the other side had all of this information well before the mediation.

The same thing holds true for the defense side. If you are on the defense side, you should remember that the plaintiff is also evaluating the case based upon what information they have. I can’t count how many times that I have been given information in mediation about information the plaintiff’s lawyer may not have. Examples include pictures of the plaintiff from the internet or social media, prior medical records or insurance claims and witnesses to the accident or injury. When I ask why the defense has not shared this information, I am almost always told that they are holding this information back so when the case goes to trial, they will have good impeachment evidence that will hurt the plaintiff’s case. However, just as I would tell the plaintiff side I will also tell the defense side to share that information, as each side is only evaluating the case based on the information they have. What good does it do if the two sides are evaluating different cases? It only makes it more difficult to settle. And share it before the mediation if you can, because it is much easier to set the expectations of your client before the mediation than it is based upon information you are being asked to absorb in the middle of a mediation session.

Why are you at mediation in the first place? You are there to try to settle the case, right? Keep the final goal in mind. Around 80% of cases settle on the day of mediation, so play the odds. Don’t leave the smoking gun in the holster, or you might be leaving without a settlement on a case that could have easily been settled.

 

Mediation Tip #4 – Don’t Sell The Opening Statement Short

April 30, 2014 by Glenn Loewenthal

giraffeAs we move through our mediation tips from pre-mediation all the way to the final resolution, the next stage I want to address is the opening statement. I wholeheartedly believe that the opening statement is the most undervalued part of the mediation. After all, the opening statement is the first time, and sometimes the only time, that everyone is in the room together. Take advantage of this great opportunity to set the stage for the entire mediation day.

Let’s start with the Plaintiff side since they usually go first. Too many Plaintiffs’ lawyers are in too much of a hurry to get the mediation started, and they come in and rush through the opening, sometimes only saying a few words. How many times have you said or heard this or something like this? “I won’t waste everyone’s time going through the facts. We’re here to mediate in good faith and we hope to be able to resolve the case.” Take my advice; don’t do this, or you will be wasting everyone’s time. How you present your opening reflects on how you will present your opening to a jury. Be well prepared. Have meticulous notes, exhibits and damages charts to hand out. If you look unprepared in your opening, the defense side will assume you will be unprepared for trial. A good but short power point presentation is very effective. But don’t do a power point presentation unless it is also well prepared. If it is nothing more than bullet points, don’t bother. Mix in photos, clips of depositions, interrogatory or admissions answers. Show the other side you are prepared. The other big mistake I see most often from Plaintiffs’ lawyers is that they don’t let their clients speak. I hear attorneys all the time say they are afraid that their clients will say something stupid, or make a bad impression. Don’t worry. Let them speak! If you have read the great mediation book by John Miles, you know that one of the chief motivators in settlements is that the clients want to be heard. They sometimes just need someone other than their own lawyer to hear their story. The mediation is probably the only chance they will have to talk directly to the adjuster, the mediator and opposing counsel in a non-formal setting. Don’t be scared by what they might say. When clients speak from their heart about how their lives have been affected, they are usually very effective and eloquent. Just the fact that they get to say their peace and be heard can sometimes be the difference in a case getting settled.

For the defense side, the advice is almost the same. Most of the time, the defense attorney says very little and keep to themselves what they perceive as key evidence that can be used later. However, it is much easier to set the expectations of the mediation at the outset than to change in the middle of the sessions by adding bits and pieces of evidence and information. The earlier that the Plaintiff can start processing the weaknesses of their own case and the strength of the defense, the better the chance for a resolution. Just as with the Plaintiff’s opening, the defense lawyer should appear prepared, well versed in all the facts of the case, and should thoroughly cover all aspects of the defense in the opening. Exhibits and other handouts are very effective. Finally, if the adjuster is present, and also if the defendant or a company representative is present, they should take a minute to speak directly to the plaintiff(s). A short statement telling them you are sorry for what they have been through, that you appreciate them being there, and that you are there to help them resolve their case, can do immeasurable good for the prospects of settling the case.

The bottom line: take advantage of the opening session. Set the tone. Be prepared. Let everyone speak. It will pay off in the end with more resolutions.

Mediation Tip #3 – Is Your Case Really Ready For Mediation?

March 25, 2014 by Glenn Loewenthal

07.12.10.mediation.tweeting

This week’s topic might have been more appropriate for my first tip, but I will from time to time address a topic that is fresh in my mind based upon recent experiences. Before you schedule your case mediation, ask yourself if your case is really ready for mediation. This might be a more important question than you think. Not all cases that I have mediated are ready for mediation. And if your case is not ready for mediation, there are consequences that could result. First and foremost, your case may not settle, and that is the reason you came to mediation in the first place. The mediation turns out to be a waste of everyone’s time and money, and that’s not good for anyone. Not even us mediators. Sure, we might get paid but that is secondary to our goal of helping the parties reach a resolution. Second, if your case does settle, it might settle for an amount that much less than it would have if the case was ready for mediation. While this is a boon for the defense, it is bad news for the plaintiff. If you are representing the plaintiff, you are doing your client a disservice by scheduling a case for mediation before it is ready. That begs the question, why is the case not ready for mediation? Most often, it is because the case is not fully developed. Attorneys and clients alike can be in a hurry to get to mediation. Don’t be! While there are instance where a case is ready for mediation early in litigation, and even sometimes pre-suit, those instances are the exception and not the norm. The vast majority of cases that are ready for mediation are those that have at least completed the discovery process. The parties have exchange discovery, all documents have been produced and all depositions have been taken. Ideally, the case ready for mediation is the case that is ready for trial. However, if you have at least completed discovery, cases can be ready for mediation even if there are motions pending. If you are the plaintiff, you want the defense to have every piece of available information to be able to evaluate your case and its value. If you are the defense, you want to have complete information to be able to do a complete evaluation. If there are questions about liability, causation or damages that have not been fleshed out in discovery, documents and witnesses, the case is not ready. The bottom line? Be patient! Don’t schedule mediation until the case is ready!

Mediation Tip #2 – Changing Pre-Mediation Demands and Offers

March 17, 2014 by Glenn Loewenthal

04.23.07.bad.mediationMediation Tip #1 dealt with knowing what offers and demands have been made prior to the mediation session. Another problem I frequently see that will derail the beginning of a mediation session is when the plaintiff makes an opening demand that is higher than their last pre-mediation demand, or when the defense makes an opening offer lower than their last pre-mediation offer. However, the former is more common and the latter is very rare, so we will focus this tip on the plaintiff’s opening demand. There are multiple reasons why a plaintiff may want to make an opening demand that is higher than their last pre-mediation demand. For example, the plaintiff may have made a pre-suit demand for the policy limits, giving the insurer and opportunity to settle the case for an amount that was within the limits where the case value might exceed the policy limits. If the demand is rejected, and suit has to be filed, the plaintiff will then want to make an opening demand for more than the policy limits. Another example is where the damages have increased since the last demand. For example, the plaintiff may have incurred more medical bills or incurred more lost income. In those circumstances, it is common for the plaintiff to demand more to settle the case than the last pre-mediation demand. There is nothing wrong with increasing a demand under the scenarios described above. HOWEVER, if you are going to increase your demand at the mediation, you MUST let the other side know that well in advance of the mediation. I can promise you that if you do not tell the other side in advance, and then spring a higher demand on them at the mediation, your chances of settling the case decrease significantly. Going into a mediation, the plaintiff will expect that that the defense’s first offer will be higher than their last offer, and the defense will expect that the plaintiff’s first demand will be lower than their last demand. Only if you let the other side know well in advance that the demand will be higher or the offer will be lower will you be able to set the expectations of the other side coming into the mediation session. A successful mediation session is all about sending the message to the other side that you are there in a conciliatory good faith effort to resolve the differences between the two sides. Starting the mediation off with a higher demand or lower offer without advance warning is sure not to send those signals to the other side.

Mediation Tip #1 – Know Your Pre-Mediation Demands and Offers

March 4, 2014 by Glenn Loewenthal

This is my first in a series of mediation tips to help you get your cases resolved at mediation. The reason this tip is the first in the series is because this is sometimes the first dispute that comes up to derail a mediation session. Most mediations, after a short introduction by the mediator explaining the mediation process, begin with opening statements by plaintiff’s counsel, followed by opening statements by defense counsel. If neither counsel mentions prior settlement negotiations, I will ask them about prior demands and offers while we are in the joint session. I think it is important that everyone be on the same page before we move into separate caucuses. I am surprised by how many times both counsel are unprepared to answer this question. Answers such as “I’m not sure but I think it is $” or “let me look through my file” or “I will need to call my office and get that information” are not acceptable answers. Any counsel that is prepared for mediation should be able to recite the dates and amounts of any settlement demands and offers that have been exchanged. Not having that information not only makes you look unprepared for the mediation, it doesn’t inspire a lot of confidence from your client. If you don’t know what demands and offers have been exchanged, then how do you know where to start the negotiations in the mediation. I have seen too many mediations spend the first hour wasting time trying to figure out where the settlement negotiations are. The defense will say “We’re not responding to that demand when our records show they demanded less a month ago”, or the plaintiff will say “we’re not responding to that offer because they offered more a month ago.” So know your pre-mediation demands and offers, have the dates and amounts written down, and have backup documentation ready to show to opposing counsel.

MEDIATION TIPS

February 27, 2014 by Glenn Loewenthal

Every time I participate in a mediation, I learn something that will help me as a mediator or that will help the parties that are mediating. What sometimes seems small or trivial to the parties and their attorneys can actually be pivotal in helping to resolve a case. Therefore, in order to help everyone to increase their odds of a successful mediation, I have started this blog to share mediation tips and strategies that I hope will help you. Look for updates on a regular basis.

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